Debates of May 31st, 2010

Natural Resources--Main Estimates, 2010-11

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, we are pleased with the success of the ecoenergy home retrofit program. Some 500,000 Canadian homes will consume less and have better energy efficiency. The average savings is 22% per home. Imagine how many fewer tonnes of greenhouse gases will be emitted and how much energy will be saved. In our Speech from the Throne, we promised to review how the programs were doing in order to keep investing in clean energy in the years to come.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, I thank the minister for being here, and his fan club, too. I think if the minister were to announce the time, he would get a cheer. We have slightly higher standards on this side.

We have all been horrified by the British Petroleum leak. The government in the U.S. has decided to suspend all drilling for six months until it can be determined why the leak occurred in the first place. The minister said he was glad to see the U.S. suspend drilling. Is the government considering a similar measure here for Canada?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, it is unfortunate that my colleague does not have his fan club with him.

That being said, as I stated earlier, the National Energy Board has engaged in a review of the entire process. This is exactly what it is doing to better understand what happened in the Gulf of Mexico and how we can improve our regulations.

Let me be clear that Minerals Management Service in the United States will be reformed to make sure it is an independent body, which is already the case here with the NEB. The United States is headed toward the stage we are at right now.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, in the gulf, British Petroleum was exempted from detailed environmental study because it thought a spill was unlikely and the spill response capability was not sufficient. In Canada this is not the exemption, it is the rule.

In 2005, oil companies were given the right not to do a comprehensive study at the exploratory drilling stage, which is what the deepwater was at, but just to hand over a two-page screening to the government. Is the government comfortable with such a weak environmental assessment of the potential damage from the drilling process?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, Canada has legislation in place that provides a robust regulatory regime for all offshore oil and gas activities to ensure the highest standards for safety and protection of the environment and management of our petroleum resources.

As part of the application assessment process, Canada's regulators ensured that each company has an effective management system in place that addresses safety and environmental protection, ensures personnel are properly trained and facilities are safe, monitors companies' mandatory safety drills and emergency response exercises, and inspects drilling rigs before and during operations. Contingency plans must include emergency response procedures which address how the company will work with the local community and the other levels of government.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, that is simply not the case. When a company under Canadian law goes to do an exploratory well, just like the Deepwater Horizon, there is no regulatory requirement for an environmental assessment. There is no regulatory requirement for a cleanup plan. There are no specific regulatory requirements for any of these things. This is in fact the matter. This, in 2005, was given over by the NEB to say that these are objective based.

In 2009, the government moved to goal-based regulations from prescriptive ones. The terminology is important. In the U.S. the government requires the “best available and safety technology”, while in Canada the rules require that it be “adequate” and “reliably operating”. These are guidelines, not regulations. There are no regulations guiding this. Is the minister concerned at all about that fact?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, with all due respect, Canada's oil and gas drilling and production regulations are very strict. The operators must follow a series of steps because, as we know, it is the responsibility of the operators.

The National Energy Board, an expert, quasi-judicial organization, also has the right to ask for a financial guarantee in advance, up front, to ensure that it is able to act immediately if there is a spill or damage. And it always works on a cost-recovery basis. It is an independent organization with very rigorous standards.

As I said before, if we look at the United States, President Obama has decided to divide the Minerals Management Service into three divisions in order to ensure impartiality and to create an independent organization, which is what we have had here for 50 years with the National Energy Board.

And the National Energy Board has decided to launch an in-depth study on the entire procedure. The public will be invited to submit comments, and the study will be open and transparent.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, I have a very specific question for the minister.

In the U.S., there is a regulatory requirement that companies prove they have the fiscal capacity to drill a relief well in the case of a blowout. Is that the case in Canada?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, I invite my colleague to look at the act governing operations, the Canada Oil and Gas Operations Act. This act clearly establishes a liability regime. As I said earlier, the National Energy Board can require operators to provide both an up-front financial guarantee as well as a solvency plan. I invite my colleague to look at these provisions.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, I just want it to be clear for those watching. In the U.S., there is a regulatory requirement that companies have the fiscal capacity, the money on hand, to drill a relief well. In Canada there is no such requirement.

Second, the minister seems to have an unending faith in the oil and gas companies to regulate themselves. In the U.S., when a lease is taken out, as in the case of the Beaufort, on both sides of the border, an environmental assessment is required. Is this the case in Canada? Is an environmental assessment required at the leasing stage in offshore drilling in the Arctic?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, again, as I was saying earlier, when it comes to financial obligations, the Canada Oil and Gas Operations Act is quite strict. Guarantees can be required by the National Energy Board.

The important thing that we ultimately want, and only the National Energy Board can provide, is the assurance that no project will see the light of day until the board is convinced that workers' safety and environmental protection are guaranteed.

We have the tools to do this in Canada and, again, a general review will be done shortly to which the public will be invited to submit comments.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, when contracts are signed for leases in Canada, the oil companies must commit to explore and spend money. Is there an environmental assessment required at this stage by Canada?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, perhaps the member should address his questions to my colleague, the Minister of the Environment. What I can tell him is that the National Energy Board is in charge of managing the application process for drilling offshore or on land. And when it comes to drilling, strict regulations must be followed and no project will see the light of day until the board is convinced that there will be no harm to workers' health or the environment. And this requires response plans and contingency plans. The operators must prove that they are able to take action.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, I am concerned by the minister's unwillingness or lack of knowledge on this file. He asked me to refer to the Minister of the Environment. The Minister of the Environment has no purview over this whatsoever. It is under his watch and the Minister of Indian Affairs. That is it.

The requirement by the NEB to have these so-called stringent rules that the minister spoke of, in 2005, NEB Chair Caron said “to contribute to an innovation and economic growth and to reduce the administrative burden on business”.

At the Nova Scotia level, the chair there said:

And we are considering allowing new technology [to reduce costs] for exploration. This might require regulatory changes. We’re looking into that now. Flexible. Flexible. Flexible.

Does the minister feel that the NEB is in any conflict of interest whatsoever?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, it is unfortunate to be questioning the integrity of the National Energy Board. It is a quasi-judicial organization, independent from the Government of Canada, that has been in place for 50 years and whose history speaks for itself. This organization must work within a legislative context. Earlier, I referred to the Canada Oil and Gas Drilling and Production Regulations, which fall under the Canada Oil and Gas Operations Act. The act sets out all sorts of conditions that must be met by the operators, including the fact that operators must assume responsibility for spills and damage. All of these conditions are studied beforehand by this expert board.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, how many members of the NEB has the current government appointed?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, I would encourage my colleague to take a look at the National Energy Board's 50-year record, which speaks for itself. It has always ensured environmental protection and public and worker safety. It is an independent, quasi-judicial organization. It does not report to the government. The board ensures that no project goes ahead unless environmental protection is—

[The Deputy Chair, NDP, Denise Savoie]

The hon. member for Skeena—Bulkley Valley.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, it is quite okay if the minister does not simply know the answer, rather than repeating general considerations of the NEB.

The government has appointed 10 of the 12 members to the NEB. The majority of members now sitting on the NEB have deep, long, close and personal ties to the oil and gas industry. Some 90% of the funding for the commission comes from the oil and gas industry. No one is casting aspersions. We simply wish the minister to actually know this file.

Could the minister answer as to how many of the NEB staff spend at least 75% or more of their time on environmental protection?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, it is unfortunate to hear such allegations. The NEB decisions are made by a team of seven full-time and four part-time board members. The board members are recruited through competition and through their expertise in the field. The NEB is independent, unbiased and operates at arm's length from the government. The NEB regulates more than 71,000 kilometres of pipeline, shipping approximately $75 billion worth of oil and gas. This was the number in 2009. The NEB regulates 1,500 kilometres of power lines that transmitted $3 billion of electricity in 2009 once again.

It is just unfortunate to hear those kinds of statements.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, does the current government have any position on increasing the export of raw bitumen from the tar sands and the export of the process and jobs connected with it?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, the government wants to position Canada as a clean energy superpower. The oil sands are part of a robust mix of energy sources. We want to make the oil sands an economic driver. They can also help us guarantee energy security for North America. They must be developed responsibly. That is our government's focus.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, does the government have any policy on the exporting of raw bitumen from the tar sands to be processed in other countries?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Madam Chair, the oil sands are a key strategic resource that will contribute to energy security for Canada, North America and the world for decades to come. More than half of Canada's oil exports and some 125,000 direct and indirect jobs are associated with oil sands development. The government is committed to working with the Alberta government and industry to develop this resource in a sustainable way.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Chair, it is strange to hear the members from Alberta cheering about the export of jobs from their own province.

Does the minister believe that the plan for supertankers filled with raw bitumen sailing through the tanker exclusion zone in fact breaks the tanker exclusion zone?